Housing Emergency is not an Accident

As Summerhill occupation activists take over abandoned properties in Dublin, People Before Profit TD Richard Boyd Barrett details how Ireland’s housing crisis is not an accident but a policy that benefits the few over the many.

The human misery being suffered by tens of thousands of women, children and men caught up in the current housing and homeless emergency is quite simply shameful. Since being elected to the Dail in 2011, my constituency clinics have seen a constant and ever worsening stream of hardship, anxiety and desperation, resulting from emergency housing situations. How could the government have got it so wrong and failed to provide the public and affordable housing we so desperately need?

According to Minister Murphy, it’s because “building houses takes time”—“we can’t just build houses overnight.” This oft repeated mantra is an attempt to cover-up for disastrous policy mistakes and a slavish adherence to free market ideology by governments both before and after the economic crash of 2008.

Even during the Celtic Tiger years, when housing out-put was at record levels of 70-90,000 units per year, the housing crisis was getting worse not better. Profit driven developers were building homes that no-one could really afford while Council housing output had slowed to a trickle and waiting times on Council lists were already 8-10 years. Social housing was being outsourced to the private sector through Part V of the Planning & Development Act. Developers could and did often buy themselves out of their 20% social & affordable housing obligation.

The Policy that Abandoned Council Housing

When the crash came, an already bad situation was made much worse by the decision of the new Fine Gael/Labour government to abandon Council housing construction altogether. On June 16th 2011, within months of coming into office, the new government published a housing policy statement that made the current housing and homeless emergency a racing certainty.

The Department of Environment, Community and Local Government policy statement referred to a “fundamental reconfiguration of the landscape of housing support in Ireland” and stated the government’s view that it must “rule out a return to very large capital-funded construction programmes by local authorities.” i.e. Stop Building Council Houses!

It went on: “A restructuring of the social housing investment programme to allow for the delivery of new social housing through more flexible funding models….” and “….in particular, the Rental Accommodation Scheme (RAS)…” Though the name had not been dreamed up yet, we were on our way to HAP’s (Housing Assistance payment) and the current housing emergency.

I tried to raise the alarm bells with a press release and press briefing, headlined “Government abolishes Council housing to bail out the banks – and no one is saying a word” on June 14 2011, warning the new policy would rapidly generate a housing crisis. The media largely ignored us but subsequent events confirmed our worst fears. What madness inspired this move, when, even then, there were more than 96,000 families on the housing waiting list? Needless to say, it wasn’t people in housing need.

The Role of NAMA

The answer is to be found in NAMA, who had paid €31.8 billion for distressed land and property loans and was mandated to sell them and deliver a profit, if possible. In the years 2012/2013 Finance Minister Michael Noonan and/or officials from his department held 65 meetings with vulture funds, such as Lone Star, Cerberus, Apollo, Kennedy Wilson and others.

In the following years NAMA off-loaded more than €40 billion worth of property and land assets to these vultures and other developers at bargain basement prices. According to Minister Noonan, this would “revive” the property market and create a more “professional” landlord class.

As would soon emerge, these property investors would not only get hold of billions in property at a major discount but also would benefit from section 110 tax relief that meant they would pay no tax on rental income or capital gains. Of course, these speculators and developers were in no hurry to build houses and neither was a government, whose central priority was driving back up the value of property and the income that it could generate. Today vulture funds and speculators take this policy to its logical conclusion, hoarding building land and sitting on empty property to watch its value clock up before cashing in at the optimal moment.

Vultures Profit while Homeless Despair

So for some, this dire housing crisis is not an emergency at all but rather a golden opportunity to make staggering profits. The worse the housing crisis gets, the more profit is made by a small cohort of speculators and vultures. As with the Celtic Tiger property bubble, recent government policy has encouraged, facilitated and incentivised the speculation, the evictions and profit gouging.

So how do we undo this mess and resolve this apalling housing emergency?

It’s not rocket science. We must commence building on a very large-scale, public and genuinely affordable housing on public land and, on NAMA land. We need to build an absolute minimum of 10,000 council houses a year and a similar number of genuinely affordable houses. This will not only help those on housing lists and in emergency accommodation but by flooding the market with low cost housing it will drive down the cost of housing in the private market, which is now out of reach of the vast majority of even better-paid workers.

We must also pass emergency legislation to stamp out speculation and hoarding, by requiring residential building land to be developed or empty residential property be brought into use within 6 months, under pain of it being taken over and utilised by local authorities for public and affordable housing.

If the vultures flee—excellent! They are the problem not part of the solution.

To achieve this radical shift in policy, we need people power on the streets. To this end mass pre-budget protests are planned by the National Housing & Homeless Coalition for the first week of October.